CNN LATE EDITION WITH WOLF BLITZER

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. WOLF BLITZER, HOST: It's noon in Washington, 9:00 a.m. in Los Angeles, 7:00 p.m. in Damascus, Syria, and 11:00 p.m. in Astana, Kazakhstan. Wherever you're watching from around the world, thanks for joining us for this two-hour LATE EDITION.

We'll get to interview with U.S. House Democratic Leader Richard Gephardt in just a few minutes, but first, a quick check of the hour's top stories. We begin in the Middle East, where Pope John Paul II is making an historic visit to Syria. This visit marks the second leg of his pilgrimage to retrace the biblical journey of the Apostle Paul, who is believed to have converted to Christianity on the road to Damascus.

At this hour, he's visiting a mosque in Damascus. Pope John Paul is the first pontiff ever to go to Syria.

Earlier, thousands turned out to see the pope, as he celebrated Mass in a soccer stadium.

Millionaire space-traveler Dennis Tito is safely back on earth. He landed this morning in Central Asia in Astana, Kazakhstan. Tito said the trip was 10 times better than what he'd expected, but he has no plans to go back in space.

Space Adventures, the U.S. company which helped Tito finance the ride on the Russian spacecraft, says it has several more customers for a trip into outer space.

Here in the United States President Bush is pressing Congress to approve his budget and tax cut proposals and to go forward with a new national missile defense system.

CNN White House correspondent Kelly Wallace joins us now live from the White House with details.

(NEWSBREAK)

BLITZER: And joining us now from the CNN center in Atlanta to talk about the president's agenda is the top Democrat in the U.S. House of Representatives, the minority leader, Richard Gephardt of Missouri.

Congressman, thanks for joining us once again on LATE EDITION. And I want to get to the domestic agenda in a moment but on this national missile defense system, what's wrong with what the Defense Secretary Donald Rumsfeld says, that this is a missile defense system designed to deal with a threat from what are he calls rogue nations -- Iran, Iraq, North Korea. Isn't it worth the money to protect the United States from that threat?

REP. RICHARD GEPHARDT (D-MO), MINORITY LEADER: Well, the idea has merit, but we've got to go slowly, we have got to make sure we know what we are doing. And we have to be sure that it works with other countries in the world -- our allies in Europe, the Russians, the Chinese. We've got to find a way to do this, so that A, it works, and B, that it works with the other thinking that is around the world, so we don't do something unilaterally that causes us more problems than it solves.

BLITZER: Will you support funding to continue testing over the next year or two?

GEPHARDT: Sure. We need to do the testing. We need to find out if we can solve the technological problems.

As was said on the report a moment ago, we had some tests during the Clinton administration. They were all failures. We did not show that we knew how to knock down all the decoys they put up.

So we are a little ways away, maybe a long ways away from knowing that we can do this. I just think we've got to slow down, apply the right criteria, do this sensibly. And if it can't be done, then we have to look to other means to increase the security of the United States.

BLITZER: Congressman Gephardt, let's turn to the budget. There was supposed to be passage of the budget late Thursday night. As you know, that was delayed because two of the pages of the budget were somehow found to be missing. That has delayed the vote until Tuesday.

It does include a $1.35 trillion tax cut for the American people over the next 11 years, just short of the $1.6 trillion the president proposed. It is going pass on Tuesday, in the House of Representatives, isn't it?

GEPHARDT: Well, it probably will, but I'm not sure.

What happened on Thursday, was we waited around for 15 hours in the House for this budget to come up. And I'm glad they finally lost two pages, because now the American people have four full days, as we should have had from the beginning, to really learn what is in this budget, what the tradeoffs are.

We believe the cuts in education, in health care, in Social Security and Medicare, in police on the beat are unacceptable policy choices for the American people. They were trying to fog one by us the other night. They didn't get it done, and now we have a chance to really look at what is involved. And the Democrats in the House are going to be doing a little teach-in on Tuesday trying to get across to the press and the public exactly what the tradeoffs are for a tax cut.

Look, we need big tax cut but it just doesn't need to be so big that we cause new deficits, cause interest rates to go up, and the underfunding of important programs, like health care, education, Social Security.

BLITZER: But, as far as the tax cut that the number they have worked out, the Republican leadership and a few moderate conservative Democrats in the House as well as in the Senate, that number looks like it is pretty steady.

Your problem isn't with most of the Republicans, but there is a handful of Democrats in the House and the Senate, and they seem to be going along with the president and the Republicans.

President Bush paid tribute to them the other day. I want you to listen to what he said over at the White House.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It couldn't have been done without the cooperation and work of some of our Democrat friends: Breaux of Louisiana, Miller of Georgia, Condit of California, members around this table who realized that it was time to come together to put a good budget together on behalf of the American people.

(END VIDEO CLIP)

BLITZER: So your problem is with some of those moderate and conservative Democrats, primarily, isn't it?

GEPHARDT: Wolf, what happened the other night, when we finally started to get the language, was that these Democrats saw that the deal they had made was not really being carried out in the language of the budget.

So one of the reasons this thing didn't go through Thursday night was that they found what they called a stimulus tax cut over the next two years is really not in the bill. In the House, they tried to spread it over 11 years, so the overall tax cut could be larger over that period.

So right now, unless that gets solved, I think some of these moderate Democrats are going to be coming off the bill.

Beyond that, no one is looking at the total cost of this tax cut. It's not 1.35. When you put the interest cost in the budget and the other tax cuts that are coming down the road, you're clearly at $2 trillion, maybe even more.

So I just hope we'll have the time here for people to really look at the actual specific language and the tradeoffs, again, that we're undergoing in order to have a tax cut this large.

BLITZER: Do you expect any of the Republicans, moderate Republicans, liberal Republicans, to join you in opposing the president's budget?

GEPHARDT: They may, Wolf. I've talked to some of the moderate Republicans in the House. They are feeling uncomfortable with the cuts in education. This budget now is under, by far, the numbers that the Republicans had in the House for education. It's far under the bipartisan agreement in the Senate on education, under the president's program.

Again, we're going to go back into high deficits. We're not going to have Medicare prescription medicine. We're going to have cuts in cops on the beat, cuts in energy and environmental programs.

And again, this is to do a large tax cut that really helps the special interests and doesn't do enough for the middle-income and poorer Americans that really need the help out of this tax cut.

So this just doesn't make sense, and if we can get people to stop for a minute and really look at this thing and the real tradeoffs that affect people, ordinary people out there every day, I think we'll get some more votes and make a different decision.

BLITZER: If the final vote Tuesday is largely along party lines in the House of Representatives -- the Republicans, of course, have a slight majority. But the House Majority Whip Tom DeLay says, if it becomes a party vote, it's largely the result of the Democratic leadership in the House and Senate. Listen to what Congressman DeLay said earlier in the week.

(BEGIN VIDEO CLIP)

REP. TOM DELAY (R), TEXAS: After every turn, Dick Gephardt and Tom Daschle and the rest of the Democrat leadership have fought to increase government spending and to take more of American families' money. They badgered Democrat members to reject the president's agenda, and they have abandoned their promise of bipartisanship.

(END VIDEO CLIP)

BLITZER: The House majority whip is being very, very direct, saying you have refused to cooperate with the president who sought to reach out to you.

GEPHARDT: Well, that is just wrong, Wolf. We have tried in every way to see if we could find bipartisan agreements with this president and with Republicans in the Congress.

And the truth is, we've been shut out at every turn. There has not been one attempt on one committee, certainly the budget committee, to include Democrats. This agreement that came out the other day, no Democrat knew what was in it, no one was talked to beforehand, they were shut out of the conference. They went to one meeting and were never invited back. This is the most partisan administration and Republican Party that I've ever seen in 25 years in the Congress.

Now, he says that I've badgered Democratic members. I can't do that. Democrats vote the way they want to vote. But remember, some of the most conservative Democrats are against this budget for all the reasons I gave a moment ago.

BLITZER: Well, if this president is as partisan as you suggest that he is, why has he worked so cooperatively with House and Senate Democrats on the issue that he says is the top domestic priority, namely, education, agreeing with Senator Ted Kennedy, for example, on the fundamentals of an education bill, to the irritation of a lot of conservative Republicans, who think he's abandoning many of his gut commitments, including school vouchers?

GEPHARDT: There has been conversations and negotiations on education. And there is a good deal of agreement, especially in the area of standards and accountability, which many conservative Republicans don't want to do.

But on the critical issue of funding, of resources to help local schools reach those standards, there is no agreement.

And after this budget gets out and people really look at it, I think you'll see that there's not likely to be an agreement, because the numbers are under where the president came on education with his budget.

BLITZER: The president this week announced his Social Security commission to take look at the future of Social Security, insisting he's got to get down to this project. And his aides saying President Clinton avoided Social Security, dealing with long-term problems, for eight years. He wants to do something about it now.

BLITZER: Listen to what the president said.

(BEGIN VIDEO CLIP)

BUSH: We can postpone action no longer. Social Security is a challenge now. If we fail to act, it will become a crisis. Our government will run large budget surpluses over the next 10 years. These surpluses provide an opportunity to move to a stronger Social Security system.

(END VIDEO CLIP)

BLITZER: The most controversial proposal he is supporting would allow a privatization, allowing Social Security recipients to invest 2 percent, a very small amount of their money, if that, in the stock markets, some other investments. He says right now the 2 percent interest they get is about what you could get back keeping your money in a mattress.

So what's wrong with allowing a little bit of privatization to deal with the long term solvency of Social Security? GEPHARDT: Wolf, I think all of us ought to look seriously at all different proposals for dealing with Social Security. I don't reject anything, and I don't say anything should be decided on.

My problem is, again, with this issue of bipartisanship. In 1983, then President Reagan appointed a Social Security commission after consulting with Tip O'Neill, who was then the speaker, and other Democrats to put people on the commission, so that all points of view were represented. That wasn't done this time. No one talked with any Democrats. All of the people that the president put on the commission have already decided what they think reform of Social Security should be about. This is a commission that is not going produce what we need, which is consensus.

BLITZER: On that point, a lot of people greatly respect former Senator Daniel Patrick Moynihan, a Democrat. There is an equal number of Democrats on this commission as there are Republicans. Are you questioning Senator Moynihan's commitment to Social Security?

GEPHARDT: I don't question his commitment at all, and the others as well, Republicans and Democrats. What I worry about is there was no consultation with any Democratic leader, party leader or others in the country to come up with the right names. And again, in '83, Tip O'Neill suggested the head of AFL-CIO and Claude Pepper, who was a senior advocate.

So, when you finished the work of this commission, you had a real consensus that you could bring through the Congress in a bipartisan way. The people that he put on this commission have already decided. This is a stacked deck on what Social Security reform should look like.

BLITZER: Congressman Gephardt, we only have a second or two left, but in a word, are you thinking about running for the presidency in 2004?

GEPHARDT: I'm thinking about winning back a majority in the House, so that we can have a better agenda than the one we have now on health care, on education and on a budget that will keep us out of deficits and continue the kind of great economy we saw over the last 10 years.

BLITZER: All right, I guess that answer is, we don't know yet. But the House Democratic leader, Richard Gephardt, thanks for joining us today on LATE EDITION.

GEPHARDT: Thank you.

BLITZER: And just ahead, we'll hear from other side of Capitol Hill. What chance do the president's budget and Social Security proposals have in an evenly divided Senate? We'll ask Alabama Republican Senator Richard Shelby and North Carolina Democratic Senator, John Edwards. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. TOM DASCHLE (D-SD), MINORITY LEADER: He was dragged kicking and screaming to that number and now has claimed victory, and I've said it before, but I will take more victories like that.

(END VIDEO CLIP)

BLITZER: The Senate minority leader, Tom Daschle, commenting on the White House's agreement this past week to a $1.35 trillion tax cut over 11 years. President Bush had been pushing for a larger cut of $1.6 trillion.

Welcome back to LATE EDITION.

We're joined now by two members of the U.S. Senate: in Los Angeles, Republican Senator Richard Shelby of Alabama, and here in Washington Democratic Senator John Edwards of North Carolina.

Senators, welcome back to LATE EDITION.

And first of all to you, Senator Shelby. I understand it's your birthday today, so I want to say happy birthday. I'm sure Senator Edwards want to say happy birthday to you as well. So, on behalf of him, we both wish you happy birthday.

SEN. RICHARD SHELBY (R), ALABAMA: Thank you both.

BLITZER: Let's get to what the House Democratic leader, Richard Gephardt, just said, that he acknowledged the budget was likely to be passed in the House of Representatives on Tuesday. It will then go to the Senate in a 50-50, perfectly, evenly divided Senate. It's going to have a little bit rougher going.

But are you fully comfortable with that $1.35 trillion tax cut, even though it's across the board and a lot of wealthy people are going to get a lot of huge tax cuts if it's finally approved?

SHELBY: I think it's, overall, a good package. It's uniform because all people pay taxes, and I think that's the fairness about it. We shouldn't single out tax relief just for one group against the other. Playing one group against the other is not good politics in the long run in America.

BLITZER: The argument that many Democrats make is that those wealthy people made a lot of -- gained a tremendous amount over the past eight years with the stock markets going up and with the economy booming, and they really don't need those tax cuts as much right now as poor and middle-class, working American families do.

SHELBY: Well, that's the old class warfare, but I don't think that's America. In America, everybody's hoping to do better. We have in place the opportunistic society. That is what I have always pushed for, politically and economically.

And if people pay taxes, which all people do, or should, the tax relief should be uniform. And I think that's one of the tenets of the Bush proposal that is selling, and that will help sell this package.

BLITZER: What about that, Senator Edwards? Why not give everybody a tax break, especially those who pay the most? Shouldn't they get a break as well?

SEN. JOHN EDWARDS (D), NORTH CAROLINA: Oh, I think there should be tax relief for everybody, no question about that -- including people, by the way, Wolf, who work and only pay payroll taxes and don't pay income taxes.

BLITZER: They're not included in this tax cut.

EDWARDS: They are not included in this tax cut, that's exactly right. There should be something done for them.

But in addition to that, Wolf, I think the sort of the fundamental thing here, is we really need be honest with the American people, be straight. And the biggest problem with this budget this's coming out of conference is, it doesn't make sense overall.

If we just apply some good old common sense here, there's education spending that's been approved by the United States Senate, it's been taken out of this budget. There's $40 billion over 10 years for defense spending, additional defense spending. Everybody knows that's not enough. The president's proposing this Social Security commission and talking about privatization. Nothing in the budget for that. He's proposing, this past week, national missile defense, nothing in budget for that.

So the bottom line is, this budget doesn't work. And if we're not careful -- and I think we have responsibility to be careful. If we're not careful, what we've got here is a recipe for deficits, going back to where we were back in the 1980s.

BLITZER: Well, Senator Shelby, there's a lot of points that Senator Edwards makes. But let's get to that issue that Democrats make across the board, that payroll taxes for working, poor, middle class, that's where they need some benefits, and there's no tax cuts so far as the payroll taxes are concerned.

SHELBY: Well, there's no doubt about it that the payroll tax hits the working Americans, hits all Americans, very, very hard. As a matter of fact, some people pay more in payroll tax than they do income tax.

How do we deal with this? We're not sure. But I would not ignore some solution to that, should there be some offset somewhere, to the very hardworking people of America, who are now paying, I believe, too much in payroll tax and not keeping enough for their families.

BLITZER: So, just to nail that point down, once this process goes through in appropriations -- and there's going to be a lot more consideration of tax cuts in the coming weeks and months -- are you suggesting there may be some reductions, when all is said and done, in the payroll taxes, which the president has not proposed? SHELBY: You know, I don't know. That would be something that would have to be handled by the Finance Committee and the Budget Committee.

But you've got to remember, what we're going to do next week -- this is the budget statement. This is not the appropriation process; this will follow. This is not even the reconciliation. But it is a good step, and I believe it's a big victory for the Bush administration.

BLITZER: Senator Edwards, there was an editorial in USA Today earlier this week on Friday, and among other things it said this. Let me put it up on the screen.

"The good news this week is that the Bush administration's insistence on a massive tax cut has already produced a noticeable benefit. It has imposed a modicum of needed fiscal discipline on a spendthrift Congress."

What's wrong with that? Obviously, a lot of people don't like a lot of government spending just going up and up and up.

EDWARDS: Oh, no, we agree with that. We absolutely agree with that. And I have said all along, Wolf, that I think we need a serious tax cut.

But there are some fundamental principles that have to be met by any tax cut. Number one, it needs to be fair. We have talked about that already. Where do the benefits go, and how are they distributed to taxpayers?

Secondly, it can't put Medicare at risk. And this most recent budget proposal that's coming out of conference raises a serious question about putting Medicare at risk.

And third, we need to pay down the debt to the extent we are able to pay down debt. Those are three sort of basic things have to be met by any tax cut.

BLITZER: I want to bring Senator Shelby back in, but specifically, where does it raise problems as far as Medicare is concerned? Where is the specific threat to Medicare from this budget?

EDWARDS: Well, the problem is, what's happening is that, as the money comes in over the course of the next 10 years, there is a chunk of money that is payroll tax money devoted to Medicare. There is nothing being done to protect that money. And because of the size of this tax cut, it is effectively invading that Medicare money.

BLITZER: Senator Shelby, do you agree with that fear that Medicare is being endangered by this budget?

SHELBY: No, I don't agree with it at all. As a matter of fact, I think the Bush administration and the Republicans and a lot of Democrats are going to make sure that Medicare is protected, that there is going to be a prescription drug benefit to the people who really need it in America. It might not be for everybody, but everybody doesn't need it. But we need to meet the demand, for the neediest in America.

BLITZER: Senator Edwards, I know you want to respond to that.

EDWARDS: Well, just very briefly. There is absolutely nothing in this budget that walls off or protects Medicare money, the payroll taxes that are coming in for Medicare. And in fact, if you look at over the course of 10 years, the reality is -- the likelihood is that we put Medicare money at risk over that 10-year period.

BLITZER: Senator Shelby, there has been a lot of cooperation between the White House Senate Democrats and some Republicans on the issue of education to the irritation of some of your conservative Republican colleagues, not only in Senate but elsewhere, outside the Senate, as well.

Bill Bennett, of Empower America, former Secretary of Education, wrote in L.A. Times on Friday. He said this: "The option of choosing private schools has vanished. The remaining options simply do not allow true choice."

The point being that the president and Senator Kennedy have reached and agreement basically that will not include school vouchers, which would have allowed federal money go to parents who send their kids to bad public schools to allow them to move to private or parochial schools or even have home schooling.

Are you disappointed that the education bill that is now working its way through the Senate is not going to include those school vouchers?

SHELBY: Well, I believe we should, at the least, set up some type of pilot programs all over the country to see if the vouchers will really improve people's choices and the education of their children. I would like to see that happen.

And of course this legislative session is not over yet. We've got a long way go. This is a statement. I believe that it's a compromise on educational front. That's the only way we could do it. We have a 50-50 split. If we had 65 Republicans or 65 Democrats, you would have a different game.

But I believe, overall, this is a good approach. This compromise will work, and I think we've got to make it work for the benefit of our children.

BLITZER: Like Senator Kennedy, Senator Edwards, I assume you are on board this education bandwagon?

EDWARDS: Well, I am, Wolf. But there's a really important question that's yet to be resolved.

Much of the president's proposal is modeled after North Carolina. And what we did in North Carolina is we had testing, measurement, real accountability, we identified the schools that were low performing, and then we went in and did what was necessary to turn those schools around.

But when we had schools in poor school districts, we made sure they had the resources to turn those schools around. And what we're going through on the floor of the United States Senate now is determining whether those resources are going to be available once we have done the identification, once we have made the intense efforts to turn it around. Ultimately, that's a critical question in this process.

BLITZER: All right, senators. We have to take a quick break. We have a lot more ground to cover.

Senators Richard Shelby and John Edwards will also be taking your phone calls. LATE EDITION will continue right after this.

BLITZER: Welcome back to LATE EDITION. We're continuing our conversation with Republican Senator Richard Shelby of Alabama and Democratic Senator John Edwards of North Carolina.

Senators, we have a caller from Colorado. Please go ahead with your question.

CALLER: Yes, thank you very much. I'd like to know what the senators think, how do they think that the privatization of Social Security would benefit anybody, but specifically young people, in view of what's happened to the stock market in the past year?

BLITZER: Senator Shelby, the president announced a new commission this past week to study that very specific issue. What do you think?

SHELBY: I believe the study's very important. We've got to do something, Wolf. We've got to see where where Social Security is going to be in, say, 20 years or 25 years. Because, if you look at the math, at the amount of money going in now and the obligations in the future, it just won't work.

I have a lot of confidence in this commission. I know Congressman Gephardt perhaps didn't earlier on the program.

But Senator Moynihan has been involved in the Social Security debate a long time, and there are others on this. I'd like to see what comes out of this commission. The '82 commission that was referred to -- I believe Alan Greenspan chaired that -- that resulted in some specific legislation. Perhaps we'll learn something from this commission that we, on both sides of the aisle in Congress, can do something positive for Social Security and the recipients of the future.

BLITZER: Senator Edwards, President Bush, in announcing the commission, made a specific point on the need to look for some solutions to the long-term stability of Social Security. Listen to what he said at the White House this past week.

Well, we don't have that, but basically what he said...

EDWARDS: Why don't you tell me what he said.

(LAUGHTER)

BLITZER: I'll tell you what he said: "Young workers who pay into pay Social Security might as well be saving their money in their mattresses," because of the very low investment opportunities they have right now. Do you have confidence in Senator Moynihan and this commission?

EDWARDS: Well, I think we will need to wait and see what the commission recommends and how they reach their conclusions. I think we ought to be open to whatever recommendations they make. There are certainly some good people on here. There does seem to be some bias toward privatization among the people on the commission, but there are some terrific people there, and we ought to wait and see what their recommendation is.

But I think, Wolf, if we get back to sort of the substantive issue, I think the issue of privatization feeds right into the budget discussion we've just had. You know, we said earlier that it's really important to be straight with people about the budget that we're going through right now. There's nothing in this budget for privatization, and most objective analysts believe there's about a trillion dollars in costs in going to privatization.

The other thing I'd add is, there's absolutely nothing to prevent us, as opposed to doing privatization, which some people call "Social Security minus," instead doing Social Security plus. The Concord Coalition has made a terrific suggestion about using some of the budget surplus for mandatory IRAs.

BLITZER: All right, I want to switch gears.

Senator Shelby, put on your hat as the chairman of Senate Select Committee on Intelligence. I want to talk about China, the standoff with China that continues over the EP-3 surveillance plane.

Do you regard China right now as an adversary of the United States?

SHELBY: I don't think they are necessarily an adversary, but they're basically a real competitor. They could be an adversary some day; we all hope not. But they're certainly, Wolf, not our strategic partner, as the Clinton-Gore administration talked about.

They are a competitor, economically, they are a competitor as far as politics, diplomacy and militarly, make no mistake about it. BLITZER: On that point, Senator Edwards, you're a member of intelligence committee as well. There's indications, based on this initial team that went over, that they could repair the EP-3, get it fixed enough to fly out of Hainan Island, but the Chinese are basically saying, we don't want you to fly it out, we want you to crate it or disassemble it, I guess for political reasons or whatever.

How important is this issue right now, the future of that EP-3?

EDWARDS: Well, it is important to us to get our property back, and the Chinese are holding our property illegally. It belongs to us, so they need to get it back to us. Now, whether it's flown out or whether it's shipped back in crates, I think, is less critical than us getting it back.

BLITZER: Do you agree with that, Senator Shelby, that, if it could be flown out, it should be flown out? It's not really that important whether it's crated or shipped?

SHELBY: Absolutely, I think it ought to be flown out, but, you know, China has possession of it, and ultimately, they will make the decision. I hope it will be a wise decision.

I think what the Chinese have lost recently is a lot of credibility and created a lot of mistrust with the American people. I have always been supportive of very positive relationships, trade relationships, exchange of military personnel and so forth, you know, learn from each other.

But I believe the last month has not been a good one for the U.S.-China relationship, and I believe that for the most part it's been driven by people in China. I don't know what's going on in China. But they're very important to us. But they should not take us for granted or take the American people for granted, because the American people are very distrustful of China right now. You can look at the polls.

BLITZER: Well, Senator Edwards, on that issue, the Chinese are very angry about President Bush's decision to go forward with this national missile defense system, saying that this is going to, in effect, analysts are suggesting, force them to increase their own production of nuclear missiles, which could be counterproductive, of course, to the entire thrust of what the U.S. is doing.

The American public seems to be pretty well divided right now on the whole issue of the national missile defense system. Newsweek in its new poll asks: Should the U.S. go forward with it? 48 percent said yes; 44 percent said no. Pretty evenly split.

Do you think that it's time to go forward with this system right now?

EDWARDS: Well, we need to prepare to defend ourselves against this threat. I mean, it is a serious threat, and it's one we need to prepare for, Wolf. One of the concerns about the president's speech this past week is, there were at least three, that I can think of, major questions that were not addressed in the speech.

No. 1, it was long on generalities, very short on details. So we don't know specifically what kind of missile defense system he is talking about.

Secondly, once we answer that question, how much is this going to cost? Which is a serious question in this budget consideration that we are undergoing right now. And, third, once we get past what's the system, how much is it going to cost, have we got one is that actually going to work? I mean, obviously, none of this serves any purpose at all unless it works.

BLITZER: Senator Shelby, what about those three questions?

SHELBY: Well, I think Senator Edwards is asking legitimate questions. I served with him on the Intelligence Committee. I also served on the Defense Appropriations. We will be dealing with these issues.

I do believe that President Bush is right to go forward with ballistic missile defense. It is a defensive system. It's not going to stir up, we hope -- saying we are going to create trouble in the world. What we're talking about is security for own troops, security of our own people and, hopefully, for our allies in the future.

But we will not ever deploy anything until it is right, until we know it works. Make no mistake about it. But right now I believe the system is beginning to work. It will work in the future but it's got to be demonstrated that it is good. It hasn't been thus far, but I believe the engineering and physics will be there.

BLITZER: A lot of criticism not only from Russia and China, potentially, but also, Senator Edwards, from the European allies. Many of them saying that this is an example of the Bush administration engaging in unilateralism, just doing whatever it wants without consulting with the other allies, one of the reasons, some are suggesting, why the U.S. was kicked of the UN Human Rights Commission for the first time since 1947.

Do you share that criticism of the Bush administration's general approach towards international issues?

EDWARDS: Well, I think in part we were kicked off the Human Rights Commission because we are the great advocate in the world for human rights. And there are people participating in that process that don't want us involved because we are such a terrific voice for human rights, and we should be proud of that.

Wolf, I think there have been serious questions raised about some of the unilateral actions we have taken. For example, with respect to Kyoto, with respect to abrogation of the AMB Treaty.

You know, the president suggests he is going to abrogate the treaty in a speech here in the United States, and then says he is going to send people out to talk to our allies. You know, you could you make an awfully good argument that is backwards. We ought to go talk to allies first and consult with them before we make these sort of decisions

BLITZER: All right, Senator Edwards, Senator Shelby, unfortunately we have to leave it right there.

But we're going to get a response to what Senator Edwards just said from the president's Deputy Defense Secretary, Paul Wolfowitz, who'll be joining us in just a moment. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

RONALD REAGAN, FORMER PRESIDENT OF THE UNITED STATES: What if free people could live secure in the knowledge that their security did not rest upon the threat of instant U.S. retaliation to deter a Soviet attack, but we could intercept and destroy strategic ballistic missiles before they reached our own soil or that of our allies?

(END VIDEO CLIP)

BLITZER: Former President Ronald Reagan back in 1983 calling for implementation of the so-called Star Wars missile defense system.

Welcome back to LATE EDITION.

Joining us now to talk about President Bush's proposed missile defense system, is the deputy U.S. defense secretary, Paul Wolfowitz.

Secretary Wolfowitz, welcome to LATE EDITION.

PAUL WOLFOWITZ, DEPUTY SECRETARY OF DEFENSE: Good to be here.

BLITZER: Earlier today, we heard from Senator John Kerry, who was on "Meet the Press," and he made the case effectively against going forward at this time with a lot of what the president wants to do. Listen to what Senator Kerry had to say.

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D), MASSACHUSETTS: Well, we have already spent $68 billion, and we have almost nothing to show for it. We have had the last two tests fail. The current budget is going to be tripled, it's going from $4.4 billion to about $12 billion. And what I think is very disturbing to many of us is, it's trying to move rapidly into space.

(END VIDEO CLIP)

BLITZER: What about that argument, that the U.S. has spent so much already and has got very little to show for it?

WOLFOWITZ: Well, first of all, I find it interesting that both you and Senator Kerry, in the show earlier, begin at what I think is the wrong point. It's back in Cold War. It's back in mid-1980's.

What we're trying to do is move beyond the Cold War, and there is an opportunity here, because our relationship with Russia isn't the relationship we had with old Soviet Union. Regulating our ability to annihilate one another shouldn't be the centerpiece of the relationship.

But there is a whole series of new threats that have emerged, partly because of the end of the Cold War, partly because they were coming anyway, and we've got to deal with them. The missile threat isn't something futuristic, something tomorrow. It's already 10 years ago almost to the month.

BLITZER: You heard Senator Edwards just say, though, that this administration is sort of engaged in what critics are calling unilateralism. You're going to consult with the allies this week, whereas he and others have suggested you should you have been consulting with them on this issue long before the president came up with this initiative.

WOLFOWITZ: The president hasn't decided anything yet, and he certainly hasn't decided budget numbers that Senator Kerry put out there. I don't know where he gets his $12 billion from.

The fact is, we and the Russians and, frankly, a lot of other countries around the world face a new threat. It is a threat of limited missile attack. We faced it 10 years ago during the Gulf War when our worst single engagement was when we lost 24 people to a scud missile attack.

I was with Secretary Eagleburger in Israel where we saw a whole country terrorized by missile attack. Ten years later we've made some progress, but it is very limping progress. We're two years away from deploying our ability to defend against a limited Iraqi scud missile capability. And one of the reasons we are so behind is because of the limitations of the ABM Treaty that keeps us from pursuing the most promising technologies.

BLITZER: Senator Daschle earlier today, was on one of the programs, said we should use the lemon law. There have been three tests, he says, that basically have failed so far. Why go forward with it when the prospects of success seem so minimal?

WOLFOWITZ: Well, I guess on that principle we wouldn't have any reconnaissance satellites because I think there were 11 or 12 or 13 failures in the Corona program before it succeeded.

You learn from tests, you learn from failure. The fact is, we finally do have a capability -- it's going to be deployed in a couple of years -- to intercept a scud missile. We're working on capabilities to intercept more capable missiles.

When the United States puts its mind to something, we can get the job done. We have not been putting our mind to this because we are still mired in a Cold War notion that success in this enterprise would be a mistake. BLITZER: I have heard all sort of estimates on the price tag for a missile defense system from $50 billion to $1 trillion. You must have some estimates of how much this is going to cost the American people to develop this kind of system?

WOLFOWITZ: Wolf, one reason it is so hard to come up with estimates is because the best ways to go after a missile are when it is in the so-called boost phase, when it's moving slowly, when it's a big, bright target. We haven't been able to pursue those means of intercept because most of them are illegal under ABM Treaty.

BLITZER: But you will go forward with that now?

WOLFOWITZ: Well, we haven't decided what to do. But what the president has decided that is the most promising methods of defense involve major changes to the ABM Treaty, and that we need to pursue those. When we pursue those, we'll have a much better idea what things actually cost.

BLITZER: If you are a strategic thinker in the defense establishment in Beijing right now, and the U.S. is going forward with a system that could effectively neutralize the 20 or 25 intercontinental ballistic missiles that they have that could reach the U.S., what do you do? Because the critics of your system say, what you do is you accelerate your own development to try to build a few hundred so that they will have that capability as a potential advantage for themselves.

WOLFOWITZ: Wolf, I think the Chinese long ago made the decision to do that. I heard you referring to the 18 or 20 earlier.

You can look at where the Chinese are today, but the fact is, China's economic strength is growing rapidly, and its military is growing along with it, and we're going to see a much more capable Chinese force regardless. And it's going to be a force that isn't going to be threatened by the kind of defenses we're building.

BLITZER: So, the defense you're building is not going to do anything that's going to eliminate the threat of a Chinese ballistic missile coming into the United States?

WOLFOWITZ: A limited attack from any direction, including an accident -- we almost had an accident when the Russians misinterpreted a Norwegian rocket a few years ago. Limited attacks is what we think we can deal with. The so-called Star Wars space shield, that's not what we are trying to do.

BLITZER: This is just strictly designed to deal with either an accidental launch of one missile or missiles coming from what you would call the "rogue nations"?

WOLFOWITZ: Or in the case of, for example, a conventional war in the Persian Gulf or Korea, to deal with what's going to be a very, very serious threat of conventional missiles against our forces and our allies. BLITZER: The ranking Democrat on the Senate Armed Services Committee, Carl Levin, spoke out on this issue earlier in the week, saying the administration is missing the real threat right now, and that threat is not from a missile. Listen to what Carl Levin said earlier in the week.

(BEGIN VIDEO CLIP)

SEN. CARL LEVIN (D), MICHIGAN: The least likely threat to us is the missile threat. We've been told that by the intelligence community and by the defense community. The most likely threat against us are truck bombs, ships, suitcases carrying a weapon of mass destruction.

(END VIDEO CLIP)

BLITZER: Is he right?

WOLFOWITZ: Look, I don't know how people think they can say what's least likely, most likely. Our ability to predict the future is not very good. We have been hit in the Persian Gulf by both missiles and truck bombs. It seems to me we ought to work against both of them.

We do a lot to work against terrorism. Would someone say we shouldn't do that because we have no defenses against missiles?

I think we have to address both problems, not say one is most likely, least likely and try to guess and focus on a single solution.

BLITZER: Germany's foreign minister was quoted in the Los Angeles Times this past Thursday as expressing his concerns about the decision to unilaterally abrogate the Anti-Ballistic Missile Treaty with the former Soviet Union, that was signed in 1972, saying this could open up a lot of problems.

Listen to what Mr. Fischer said. He said, "The ABM Treaty worked well. We want control mechanisms that worked well in the past, should they be replaced, to be replaced only by better ones or more effective ones. We don't want there to be a new arms race."

A lot of concern in Europe, and you're going off there this week to talk to the allies. A lot of concern that what you're doing is going to generate, trigger a new arms race.

WOLFOWITZ: Look, there's still a lot of people that are mired in the Cold War, who think the relationship with Russia should be essentially like the relationship with the Soviet Union, with its centerpiece being how to regulate our ability to annihilate one another with nuclear weapons.

But Russia is not the Soviet Union. Our relationship with Russia should not be based on that. And there ought to be -- and this is what we are hoping to convince people of -- there ought to be a way to decide cooperatively to move forward to deal with what is a real threat today to one another. And that is not the threat we pose to one another, but the threat that third countries pose to each of us.

BLITZER: What's the status with the EP-3 surveillance plane on Hainan Island? Can it been flown out?

WOLFOWITZ: We've had an assessment team in there. The preliminary report from them is that it's probably repairable, but we haven't looked at that in detail. We'll be doing that in the next few days.

BLITZER: The Chinese apparently are telling you they don't want you to fly it out. Why?

WOLFOWITZ: Well, I've seen that in the press, but I don't think we should negotiate through the press. We'll figure out what our options are, and then we'll talk to the Chinese.

BLITZER: How important is the actual return of that plane to the United States?

WOLFOWITZ: I think it's more important to China, to be honest. I mean, symbolically, it's our plane, it belongs to us, it should be returned to us. Its value may be quite limited by now, although it's a useful aircraft.

But I would think the most important thing is that the symbolism of getting past what was a bad piece in our relationship because of the Chinese behavior.

BLITZER: Your mission this week -- we only have a few seconds left -- tell us where you're going and what the purpose is.

WOLFOWITZ: Well, my delegation, which I'll be joining mid-trip, is going to Brussels, London, Paris, Berlin, Warsaw, Moscow. Maybe Moscow is in some ways, in a certain sense, the most important, but our allies are the critical piece in this.

It's to get people to start thinking beyond the Cold War, and it's a difficult task, because these old concepts are deeply ingrained. But they're wrong, they're antique. This is the 21st century. The U.S.-Russian relationship is not the old one of mutual terror, and yet there are new countries out there that are threatening all of us, and that's what we need to confront.

BLITZER: You know that former President Clinton is going to China this week. Does that pose a problem at this delicate stage in U.S.-Chinese relations for Mr. Clinton to be visiting China?

WOLFOWITZ: I think former presidents have a right to go where they choose to go. I don't think it's a problem.

BLITZER: Paul Wolfowitz, the deputy defense secretary of the United States, former dean the John Hopkins School of Advanced International Studies here in Washington, D.C.

You know that I'm a graduate of that school?

WOLFOWITZ: Believe me, I'm very aware of it, and proud of it too.

BLITZER: Thank you, Mr. Secretary. Thanks for joining us.

WOLFOWITZ: Thank you.

For our international viewers, World News is next.

For our North American audience, stay with us for the second hour of LATE EDITION. We'll get a different perspective on the president's missile defense proposal from former Clinton National Security Adviser Samuel Berger.

Then, we'll look at the state of the FBI as director Louis Freeh prepares to step down. Plus, our LATE EDITION roundtable and Bruce Morton's "Last Word."

It's all ahead in the second hour of LATE EDITION.

(COMMERCIAL BREAK)

BLITZER: This is the second hour of LATE EDITION, the last word in Sunday talk.

(BEGIN VIDEO CLIP)

BUSH: We need a new framework that allows us to build missile defenses to counter the different threats of today's world.

Then, in a surprise move, FBI Director Louis Freeh steps down. We'll discuss the future of the embattled bureau with former special agent Buck Revell and former Bush Attorney General Richard Thornburgh.

Plus our LATE EDITION roundtable: Steve Roberts, Susan Page and David Brooks. And Bruce Morton has the "Last Word" on education and the global village.

Welcome back. We will talk with former national security adviser Samuel Berger in just a moment. But first, let's go to Donna Kelly in Atlanta for a check of the hour's top stories.

(NEWSBREAK)

Joining us now to continue our discussion on national missile defense, is the former Clinton National Security Adviser, Samuel Berger.

Mr. Berger, thanks for joining us

SANDY BERGER, FORMER NATIONAL SECURITY ADVISOR: Good to be here, Wolf. BLITZER: You heard Paul Wolfowitz make the case going forward with a limited protective shield, not to deal with the massive threat that used to exist from old Soviet Union and the Cold War, but from the so-called rogue nations and individual missiles coming in. What's wrong with that idea?

BERGER: Well, first of all, let's remember that mutual deterrence and arms control has kept the peace for 50 years. There is something to be said for that. What President Bush seems to want to do now is go down a different road, and one I think will make America less safe. He is supporting a, I think, more robust missile defense and abrogation of the ABM Treaty.

And let me tell you why I think that will make a us less safe. First of all, as you asked Secretary Wolfowitz, it hasn't been proven that it works. So an unreliable defensive shield is worse than no shield at all.

Second of all, we don't know what it will cost. We have a $2 trillion defense budget over the next six years. This will be $100 billion or more.

No. 3, in the absence of the ABM or unilateral abrogation, I believe will be a less certain, less predictable, more paranoid environment with Russia. We will stimulate an arms race in Asia, and we will diverge from our allies.

And finally, just the last point, this really is focused on what the Defense Department itself says is the least likely threat of weapon of mass destruction to United States -- the least likely threat. The most likely being, obviously, terrorists with weapons of mass destruction, diversion of Russian missiles. We ought to be focusing, we ought to have our priorities straight.

BLITZER: But he says on the issue of whether or not could it work, he says the Clinton administration over eight years was afraid to do any of the serious kind of testing at the boost phase that would make this system work for fear it would abrogate the ABM Treaty. And as a result, he thinks the United States now has this opportunity to go forward with these tests that you, because you were nervous about the ABM Treaty, were reluctant to do.

BERGER: Well, there is nothing in ABM Treaty that prohibits us from researching boost phase, sea-based.

BLITZER: But testing.

BERGER: We are years away from that.

So to abrogate the ABM Treaty today, and set in chain a set of consequences with Russia, perhaps, walking way from arms control, with an arms race in Asia, with our allies going their own direction, when, the possibility of developing this systems is way in future, I think is a mistake.

I would rather see the administration pick up the negotiations with North Korea where we left off, to see whether or not, in fact, we can negotiate an adequate, verifiable halt to the North Korean missile program. It would be a lot cheaper than a national missile defense.

BLITZER: You say this is going to cause some serious problems, potentially, with Russia, but I heard Russian President Vladimir Putin, this week, make some encouraging signs as far as the new Bush initiative is concerned, saying he wants to talk to the U.S. about this national missile defense system.

BERGER: Well, I think certainly they want consultations, and I'm glad that President Bush is sending these teams off to talk.

But I will tell you that in a world in which there is a robust American defense and we want lower levels of offensive missiles, that is a very unstable world. That's a world when Russia has no longer confidence in its deterrent. We're moving essentially from mutual deterrence to unilateral deterrence.

We have it; they don't. I don't believe they will accept that. I believe instead what we'll see is less reduction in the Russian offensive system. And a lot of the progress that we made in arms control under President Bush -- first President Bush -- for example, in getting them to eliminate multiple weapon missiles, there will be less incentive for them to do that in this kind of environment.

BLITZER: The other criticism that is leveled at the Clinton administration was that the administration was reluctant to lead the European allies, that it's the Bush administration, their supporters, now saying that they are going to lead and let the allies follow.

Well, you know, I heard the president say that we wanted to do this with the Europeans. Now, I don't believe for a second the Europeans are going to spend the money necessary to build a national missile defense that covers Europe.

Now, are we proposing that we're going to pay for that? We need to answer that question. The allies will consult with us. But at the of the day, they will not pay for missile defense, certainly in the context of the abrogation of the ABM Treaty. And we will wind up reinforcing those people in Europe to want to see the American defense security policy and the European defense and security policy diverge and take separate directions. I think that's very dangerous.

BLITZER: Your former boss, President Clinton, is going to China this week. I can already hear the criticism that, at this delicate moment in U.S.-China relations, why is Bill Clinton going to China when he could, perhaps, send the wrong message, say something that could confuse or exacerbate an already tense situation?

BERGER: Well, this a longstanding invitation, part of a Fortune 500 symposium in Shanghai or Hong Kong, where there are a lot of American businessmen. He has spoken to the administration. He certainly will not say or do anything in China that would in any way undercut the administration.

BLITZER: So you have no concerns. I'm sure you still speak to the president, President Clinton, on these issues. You think it is a good idea for him to go?

BERGER: I think for him to cancel at this point would be a bad idea.

BLITZER: Why? Some people say that as long as they have that American plane on Hainan Island, why not send a signal to the Chinese of U.S. irritation?

BERGER: Because we haven't broken off diplomatic relations with China, as far as I know.

We need be engaged with China, both because there are areas where we can cooperate -- on trade, on nonproliferation -- and areas where we have serious disagreements, for example in human rights. We can't simply just lob grenades across the Wall on either side.

So I think there is nothing wrong with American businessmen, a former American president, members of this administration continuing to have a policy of engagement with China.

How China develops, Wolf, over the next 10 years, whether it comes into the international community or moves off in a more nationalistic direction, may be, in my judgment, one of the most important determinants of the kind of world we're going live in a decade from now.

BLITZER: On that note, we have to leave it. Samuel Berger, thanks for joining us.

BERGER: Thank you.

BLITZER: You look much more relaxed than you used to look during those eight years at the White House.

BERGER: I sleep better.

(LAUGHTER)

BLITZER: Thank you very much.

Up next, after eight years, FBI director Louis Freeh is stepping down. We'll get two views on how the agency fared under his leadership, as well as his future, from former Attorney General Dick Thornburgh and former FBI special agent Buck Revell.

LATE EDITION will be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOHN ASHCROFT, U.S. ATTORNEY GENERAL: If you were to develop a profile of a person that you would want to be a leader in law enforcement, you would probably come up with a profile of Louis Freeh.

(END VIDEO CLIP) BLITZER: Attorney General John Ashcroft reacting to FBI director Louis Freeh's announcement that he's leaving after eight years on the job.

Joining us now to talk about Freeh's impact on the agency, accomplishments and setbacks during his tenure, are two men with inside knowledge of the FBI: here in Washington, Dick Thornburgh. As attorney general under the first President Bush, he oversaw the FBI. And joining us from our Dallas bureau is Buck Revell. He served as an FBI associate deputy director under former Presidents Reagan and Bush.

Gentlemen, welcome back to LATE EDITION.

And I want to begin with you, Dick Thornburgh. If you look back on the eight years of Louis Freeh's tenure at the FBI, how did he do? And give us an honest assessment.

DICK THORNBURGH, FORMER ATTORNEY GENERAL: Well, he leaves big shoes to fill. There's no question about that. I'd characterize Louis Freeh as an all-star in that category. The bureau has acquired a new presence worldwide to keep up with the internationalization of criminal activity around the world, and he was a leader in that. He made his share of mistakes. We all do. But I think, when all's said and done, he'll be viewed as a very strong and effective leader of the FBI.

BLITZER: Do you agree with that, Buck Revell?

BUCK REVELL, FORMER FBI ASSOCIATE DEPUTY DIRECTOR: Well, I do, certainly at the end of his term. I think he's turned out to be very effective, and he's gone forward in many important areas.

He did make many mistakes initially, primarily internally within the bureau, and I think it cost him two or three years of his administration of the organization.

But I'd have to say, over the last several years, he's done quite well.

BLITZER: What was the biggest mistake he made?

REVELL: Well, he made a number of internal personnel mistakes, including how he dealt with people, taking advice from a small cadre of insiders that he had worked with before, but not accepting advice, counsel from those with a great deal more experience.

It was primarily internal issues, and then, of course, some false steps in dealing with the White House early on, you know, the various things that have become quite public, early on in his administration. But I think those things straightened out fairly quickly.

BLITZER: Senator Charles Grassley was on Evans, Novak, Hunt and Shields this weekend, and he said that there were some serious mistakes that the FBI director made. Listen to what Senator Grassley had to say.

(BEGIN VIDEO CLIP)

SEN. CHARLES GRASSLEY (R), IOWA: The weak point is, basically, that he was not able to self-correct things within the FBI organization. They have a tradition of having more public relations concerns than substance concerns.

When the FBI people do what they do best, seek the truth and let the truth convict, they're very good at it. But when they worry about their public relations, they're very weak.

(END VIDEO CLIP)

BLITZER: What about that, Dick Thornburgh? Does Senator Grassley have a point? A lot of legends have been written about the FBI public relations apparatus.

THORNBURGH: Well, it's ironic, I think, that Louis Freeh was and is a career law enforcement person. He was a street agent for the bureau, he was an assistant U.S. Attorney, prosecutor, served as a judge in the federal system. He didn't come to the bureau from a public relations oriented background.

And he had some stumbles in that case, but I think if I had my choice between somebody who was a straight-ahead prosecutor and who was intent upon following the evidence wherever it leads during a criminal investigation, and somebody who was slick and able to master the complexities of the news media, I'd take the former without much question.

And I can't emphasize enough the extraordinary job he did of responding to the globalization of crime. We have a presence overseas now, and the ability to cooperate with foreign law enforcement agencies, that simply never existed before, and that's a real feather in his cap, I think.

BLITZER: Buck Revell, one of the not-so-great feathers in his cap was the Robert Hanssen espionage case. Over these eight years and a lot longer than that, one of the key players in the FBI's counterintelligence operation, Robert Hanssen, is now accused of being a spy for Russia. And some say it's the culture at the FBI -- they simply didn't believe this was possible, and as a result they didn't take the kind of preventive steps to do deal with this threat, including polygraphs.

Do you accept that criticism of what happened inside the FBI?

REVELL: No, I don't. Certainly, the Hanssen case is a tremendous blow to the bureau, and certainly there needs to be a very careful evaluation as to how he was able to operate for that long. In fact, it goes back to the time that I was in charge of investigations, and I will be very interested to see what mistakes we made.

But remember that we had Richard Miller, we had Earl Pitts. The FBI has always looked internally as well as externally.

The polygraph is really sort of a conundrum. The polygraph did not stop the Ames case, it certainly didn't stop all the Cuban double agents that the CIA was operating from being actually triple agents.

REVELL: Sometimes it gives a sense of false security. Now I think there is no question the bureau's going to have to implement a polygraph policy, but it should not be the end-all of security around counterintelligence or the intelligence process.

BLITZER: Do you accept that there was this culture that the critics say prevented the FBI from being as thorough in counterintelligence than they should have been?

REVELL: No, I don't accept that. I think the incidents of this kind of misconduct are so few and far between, and when you look at the monstrous activity that was undertaken by this one agent -- I mean, a traitor to his country for money -- you realize that the bureau set about uncovering it and prosecuting. And there was no attempt to cover it up or to slide it off, and I think that is to their credit.

BLITZER: All right, we're going to continue this discussion. We have a lot more to talk about.

When we return, we will ask Dick Thornburgh and Buck Revell about some of the big challenges facing the FBI as it prepares for a new leader.

LATE EDITION will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back. We're talking about the future of the FBI with former Attorney General Dick Thornburgh and former FBI associate director Buck Revell.

Mr. Revell, as you know, there have been some serious embarrassments beyond the Robert Hanssen espionage case involving the FBI. A few examples, one being the investigation of Wen Ho Lee, the nuclear scientist at the Los Alamos lab, a lot of criticism of the way the FBI handled that, a lot of charges which eventually had to be dismissed.

Was the FBI just simply incompetent in that particular case?

REVELL: Well, I don't know the facts about it well enough to really comment on that, Wolf. I do know that any time that the media gets the scent of blood it hypes it up to the point where perhaps those that are conducting an investigation become overly aggressive and don't follow the procedures that they should have.

Certainly, the access to the kind of information that Dr. Lee had would put it at the very highest priority of investigative concerns.

But as to whether or not there were specific mistakes made, I don't know. Certainly he did put very top secret classified information on his personal computer. He took it off the site. There were reasons for concern. I don't know whether the FBI -- I certainly don't believe they hyped it. But whether they acted in the best possible process, I don't know at this point.

BLITZER: What about that? You know, there were 50 counts originally. He was indicted, and they were all dropped except for one or two minor technicalities that he pleaded guilty to. At the time it was seen as a huge embarrassment, largely for the Justice Department and the FBI.

THORNBURGH: Well, I think one of the major challenges that the new director is going to have to face is to repair the relationship between the bureau and the attorney general, and between the bureau and the White House.

My view is that the Clinton White House abused the FBI in the early days of the administration, the unjustified request of personnel background files from the bureau, the attempt to cut them out of the Vince Foster investigation, the attempt to manipulate them during the Travelgate affair. These were all bad signs and warning signs that the relationship was not going to be all that good. And of course it was exacerbated by the controversy over the campaign financing investigation.

So I think, with a clean slate, a new attorney general, a new president and a new FBI director, all of them, I hope, and expect, devoted to the same cause, that you'll have a lot closer coordination between investigation on the one hand and prosecution on the other so that some of these embarrassments may be avoided.

BLITZER: Let's take a caller from Philadelphia. Please go ahead with your question.

CALLER: Well, thank you for taking my call, Wolf.

The question I had was for Dick Thornburgh.

THORNBURGH: Yes, sir?

CALLER: With the growing threat of terrorism in the world, like the recent cases we had in Africa, in Kenya, in Tanzania, what challenges do you think the next FBI director is going to have in trying to be proactive so that such an incident never happens again?

THORNBURGH: It's an enormous challenge, a twofold challenge, really, number one, to work with law enforcement agencies around the world to increase their capability to prevent these kinds of events from occurring, investigative skills and modern, up-to-date technological operations to detect these kinds of activities; and secondly, once they occur, having the kind of relationship between our FBI and foreign intelligence and law enforcement agencies that can enable them to work together to follow the evidence, to uncover the persons responsible and see that they're brought to account and effectively prosecuted.

And I think that that's one of the things, as I said, that I credit Director Freeh with enormously. He expanded worldwide, in a way that had never been done before, the capability of the FBI to participate in effective law enforcement. BLITZER: Buck Revell, I want to get to that point that was just made. One of the criticisms that was made against Director Freeh was that he was so expanding everything the FBI was doing, there was a threat that he was creating what the constitutional framers never wanted: a national police force that would have all sorts of vast powers that it shouldn't have.

How concerned should the American public be about this growth of the FBI?

REVELL: Not at all. He hasn't grown the responsibility of the FBI or jurisdiction, but simply the means to handle the responsibilities that it's already been given, the extraterritorial laws that were passed in Congress in '85 and '86, the ability to carry out, as Dick Thornburgh has said, these investigations which are really necessary, first, to hopefully prevent, and then to resolve, cases on a global basis.

I mean, we never anticipated we'd have to be on the Horn of Africa or that we would be investigating a ship bombing in Yemen. These are things that the bureau has had to take on because it's been given the responsibility and has the jurisdiction. It hasn't sought out authority to take over law enforcement in the United States.

BLITZER: The immediate game in Washington, as soon as the director announced that he was going to be leaving, was the speculation of about possible successors.

The Los Angeles Times on Wednesday put out a list, I want to put that up on the screen. Look at these names. I want both of you take a look at the names the L.A. Times speculated about possible new FBI directors: Oklahoma Governor Frank Keating; George Terwilliger -- he served as deputy attorney general in the first Bush administration; Mark Racicot, the governor of Montana; Mary Jo White, the U.S. attorney in Manhattan, the Southern District of New York. She's, of course, leading the Marc Rich pardon investigation.

BLITZER: And look at this, Oliver Buck Revell's name was mentioned as well in the Los Angeles Times. What about that, Mr. Revell? Anybody contacted you yet about that possibility?

REVELL: No, and I don't expect they will. And I certainly, you know, it's nice to be mentioned, but I'm not interested. I served 37 years in government. I'm enjoying what I'm doing now, and I really think that there ought to be looking towards someone younger than I am. The term is for 10 years. Someone to take that position should be willing to serve that 10 years.

And there are many, many qualified people. And I hope they will look both within the FBI and within the Justice Department, because it does take a long time to really come to know -- the FBI is a very complex and sophisticated organization. And we can't afford two or three years of on-the-job learning for the person who assumes that position.

BLITZER: Should I ask Dick Thornburgh if he's younger and if he's prepared to serve 10 years as director of the FBI?

THORNBURGH: But that's an interesting list. Let me make a couple comments.

BLITZER: Very quickly, we only have a few seconds.

THORNBURGH: I think it's highly unlikely that somebody from a partisan, political background would gain appointment. And I think that would probably be a mistake. I think that they will choose someone who is a career professional, and I think the last three appointees to head FBI have been former federal judges. And I think that's probably where the administration would be wise to look.

BLITZER: Dick Thornburgh and Buck Revell offering some good advice to the president of United States on LATE EDITION. Thanks to both of you for joining us.

THORNBURGH: You bet.

REVELL: You're welcome.

BLITZER: Just ahead, from tax cuts to education to indicted Congressman James Traficant, we'll go 'round the table with Roberts, Page and Brooks when LATE EDITION returns.

(COMMERCIAL BREAK)

BLITZER: Welcome back. Time now for our LATE EDITION roundtable. Joining me, Susan Page, Washington bureau chief for USA Today, Steve Roberts, contributing editor for U.S. News and World Report, and David Brooks, senior editor for the Weekly Standard.

Steve, looks like the House is poised on Tuesday, the Senate may be as early as Thursday, to go ahead to approve the president's budget with the $1.35 trillion, 11-year tax cut. It's going to be a big win for the president, at least in the short term.

STEVE ROBERTS, CNN COMMENTATOR: I think so. You know, you never get all you want in politics, and if you get 80 or 85 percent of what you want, in a tax bill or anything else, that's a victory. And the Democrats: "Oh, we scored a victory by cutting down the tax bill from $1.6 to $1.3." A couple more victories like that, and they are out of business.

I mean, I think that Bush, to give him credit, has basically sold Congress on his priorities. Now there are going to be a lot of changes within those limits. He is not going to get the mix on the tax bill he wants. And he hasn't fully faced up to some of the implications of his tax bill for spending. He wants to spend all this money on missile defense. He has no idea how to pay for it. But by and large, I think it will be a victory.

BLITZER: Well, the New York Times, following the lead of Steve Roberts, wrote in an editorial on Friday a very similar point. Listen to what the New York Times editorial writer said.

"The problem with this budget is that it rests on a fiction promoted by Mr. Bush throughout his presidential campaign and throughout his first 100 days at the White House. That fiction is that Congress can cut taxes drastically and still have enough money for programs that the public wants and supports."

DAVID BROOKS, CNN COMMENTATOR: Steve Roberts's ghost lives on at the New York Times. He may have left but it's still there. Listen, we're looking at spending increases of 5 percent a year at a time when inflation is minuscule. We're still looking at real spending increases, so the idea that somehow the government is in starvation mode is just ridiculous.

The other fact is, and which the Bushes believe, which Alan Greenspan believes and which seems real, is that this economy, we may hit recession, but we've got fundamental productivity growth, which is going to be producing revenues over the long term over 10 years. And remember these tax cuts, they don't kick in unfortunately for another six, seven years.

BLITZER: Well, there is a $100 billion stimulus package for the first two years. That's part of this package.

SUSAN PAGE, CNN COMMENTATOR: That's right, and that's one of the impacts that the Congressional debate had on the president's tax package.

But it is, as Steve said, fundamentally a victory for the administration, and an easier victory maybe than expected in contrast to education. We finally have the Senate taking up the debate on the education bill.

But, you know, the White House calculated the education bill was going be a breeze, especially when they caved on one of the big issues on giving up private school vouchers. In fact, it's turned out to be the reverse -- tax cuts has been easier than education. The education debate is still a really lively one.

BLITZER: Well, on that point on education, I spent some time with Senator Edward Kennedy on the Hill this past week, I interviewed him. And, you know, this is the ultimate odd couple, Ted Kennedy, George W. Bush, on the issue of education. Listen to Ted Kennedy's words about President Bush earlier this week. Listen to this.

(BEGIN VIDEO CLIP)

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: I have my differences with the president on some of the health care issues, patients' bill of rights, prescription drugs, also on environmental issues and the overall budget. But on the areas of education, we have been able to find some important common ground and with a number of other of our colleagues in the Senate, Republicans and Democrats.

(END VIDEO CLIP)

BLITZER: It's amazing that the president is being hammered now by Bill Bennett and other conservative Republicans for supposedly caving on his gut issue, the issue he says is his top domestic priority -- education.

ROBERTS: A couple points here. One is that Ted Kennedy, for all of the ways in which Republicans tried to demonize him, has often worked with Republicans. He worked closely with Orrin Hatch, the conservative Republican leader of the Judiciary Committee on a number of matters. So, this is not out of character with Ted Kennedy.

Secondly, George Bush has moved on education. Remember, Newt Gingrich and his followers who took over the House in 1994, they were the ones, the Republicans, who wanted to close the Department of Education.

Those are the guys who are still objecting to Bush, but Bush understood that education was an issue, that he had to move forward on. He could not listen to the conservatives of his own party. So he has moved toward Ted Kennedy a long way in terms of what he is willing to spend, dropping the vouchers. So Kennedy, can say, yes, we've got common ground because Bush has at least moved halfway, which he has not done on some other things.

BROOKS: He's not moving, he's caved. He's moved the way you move when you fall over backwards. Listen, he campaigned on the idea that parents should have accountability. Remember that? "I trust the people. I don't trust the government."

All the accountability has been eviscerated from this. On vouchers, OK, there's going to be no vouchers. Maybe that was politically feasible, but the whole idea there was going to be testing. Schools would be able to test.

BROOKS: But under this bill, as it's emerging out of Congress, counties won't be able to compare how your county's schools do versus another's, you won't be able to tell how your individual kid's doing because the schools will be able to bunch kids. So you won't get the same individual results. In other words, parents will have very limited power.

That's why all sorts of conservatives are walking away from this bill, because it's a status quo bill which gives money to Title I, which is a program which we've spent billions of dollars on with no results, and it's just a status quo bill. Bush has caved.

BLITZER: But some conservatives, some Republicans suggesting that there's a political benefit for the president, working with Ted Kennedy and other Democrats, liberal Democrats, on education.

Paul Gigot, writing Friday in the Wall Street Journal, wrote this, and I'll put upon the screen: "Suburban voters who think their schools are fine will notice only the feel-good bipartisanship atmospherics, and the GOP will have neutralized what used to be one of the Democrats' best issues."

PAGE: Well, I think there's no political benefit that is more thoroughgoing, from what President Bush has done as president, than on the issue of education, and it is something that substantively gives conservatives some pause.

But the fact is, he has taken from the Democrats their advantage on the issue that voters routinely say is their top priority. There was one poll this week, the Battleground Poll, that showed voters actually have more confidence now in Republicans than Democrats on the issues of education. That is a revolution in political terms.

BLITZER: All right. We're going to continue our discussion. We have lot more to talk about.

Steve Roberts, I know, wants to get into this conversation.

We will, right after this quick commercial break. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back to our LATE EDITION roundtable.

You know, David, Vice President Dick Cheney is leading this task force, about to come out with his energy recommendations. But he hinted at some of them earlier in the week, speaking to the AP annual meeting, the Associated Press meeting in Toronto. Listen to what he said on a very sensitive issue of conservation.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: Conservation is an important part of the total effort, but to speak exclusively of conservation is to duck the tough issues. Conservation may be a sign of personal virtue, but it is not a sufficient basis, all by itself, for sound, comprehensive energy policy.

(END VIDEO CLIP)

BLITZER: Yet two days later the White House came with a whole bunch of conservation programs in California dealing with federal installations, military bases. What's going on here?

BROOKS: I'm reminded of when Jimmy Carter was wearing the cardigan in the White House? Turning down the heat to 66? I guess they won't be doing that in the Bush White House.

Listen, what he said is totally unremarkable. He said conservation by itself is not a sufficient basis. Now all sorts of people like the New York Times went ballistic over this. But the difficult issues which they put front and center are the need to build more power plants, maybe 1,000 more, maybe 600 more. We see that in California, we see that everywhere else. So I think -- you know, he is focusing us from the goody-goody Jimmy Carter issue of conservation, which is fine, but he said it himself: The tough issue is building these plants.

BLITZER: Politically, Susan, for anybody, any political leader to say conservation is not necessarily -- that doesn't -- a lot of people, especially suburban housewives and soccer moms are going to say, what is he talking about?

PAGE: Well, I think his tone was surprising, because you could say, "Not only do we need to conserve but also we need to build new power plants," and that's a very defensible position. But to have this tone of kind of dismissing conservation as something you'd do if you were in a girl scout troop seems notable and remarkable to me.

ROBERTS: And, you know, you pointed out, Susan, quite rightly, that Bush has made enormous strides in stealing education from the Democrats. But an issue that remains a big problem for him is the environment, and it's not just because a lot of people care about the environment. It's because the Democrats think they can use that issue as a metaphor to brand Republicans as big oil, big business, us against them. That's the phrase. They want that fight.

And Dick Cheney has got to be careful. He comes out of big oil. George Bush comes out of big oil. Speaking that way, kind of dismissively, gives the Democrats a bit of an opening, I think.

BROOKS: Defending all the Chevy Suburban drivers for getting 4 miles to the gallon.

(LAUGHTER)

BLITZER: Is that fair, though, to say that -- some have suggested that, just as Bill Clinton stole issues from the Republicans, like welfare reform or fiscal discipline, that George W. Bush is stealing an issue from the Democrats like education?

BROOKS: Well, I think there's some truth to that. One of the things that Republicans have done very well over the past couple of years is urban issues. They've had successful mayors like Rudy Giuliani, Riordan in Los Angeles. And they were sort of -- they were noncombatants in efforts to help the cities, help the underprivileged, and they've done really well over the past decade.

I'd say George Bush is the flowering of that. Though this education bill, maybe you get a success, but you do it by selling the kids down the river, because this bill won't help them at all.

(CROSSTALK)

ROBERTS: Look, David, the votes weren't there for an orthodox, conservative education...

BROOKS: I agree with that on vouchers, but he accepted things in this bill he would not accept in Texas, in a bill there. He really went way too far, and the difference was, A, he wasn't willing to fight, the way he did with taxes, and B, instead of having Washington-experienced hands, as on every other issue, on education he has Rod Paige and Margaret LaMontagne, who are very smart, good people -- they're new to Washington, and they got rolled by people like Ted Kennedy.

PAGE: Because he wanted a big victory more than he wanted a substantive bill that met his priorities, in terms of when he was governor of Texas. That's a decision that they made, that this would be their example of how bipartisanship could work, and it succeeded on -- it succeeded in doing what he wanted it to do, although actually getting to a bill is proving much more difficult.

And I don't care what Ted Kennedy said, they don't have a bill yet that's going to pass. They're still pretty far apart on some issues, like how much to spend.

BLITZER: You know, I want to move on. I want to talk about another development that occurred on Friday, the indictment on 11 counts of corruption, bribery, all sorts of other charges -- James Traficant, who's a familiar figure to those in Washington, those of us who watch CNN, those of house who watch C-SPAN, flamboyant. Only the other day, he offered this one-minute statement. Here's an excerpt on the House floor.

(BEGIN VIDEO CLIP)

REP. JAMES TRAFICANT (D), OHIO: There's now a new bra. It's called the holster bra, the gun bra. That's right, a brassiere to conceal a hidden handgun. Unbelievable!

What's next? A maxi girdle to conceal a stinger missile? Beam me up.

(END VIDEO CLIP)

BLITZER: "Beam me up," that's his trademark. These are serious charges, though, against James Traficant.

ROBERTS: Yes, but James Traficant is not a serious person, and that is one of the objections I have. You see him on C-SPAN, he says all these wacko things. He gets on television. And we spend more time talking about James Traficant than a dozen people who are out there quietly working on legislation, whether it is education or whether it is environment.

I think this is the kind of parody of the Congress which leads people to believe, "Oh, they're all like James Traficant." They're not all like James Traficant. James Traficant is off on the side.

BLITZER: But, I've got to point out this is his ninth term, meaning for 16 years the people of Youngstown and the surrounding areas have voted to keep him in the Congress.

BROOKS: Yes, and I think it is a jab at the bob forehead, the blow-dried politician you get most of the time. These are people saying, "Hey, we want somebody who looks like America." I'm not sure James Traficant looks like all 280 million Americans, at least the hair stylists hope not, but he's a real person. He's authentic.

BLITZER: We've got to leave right there. But very quickly, is it a bigger embarrassment to Democrats or Republicans? He is a Democrat, though he voted for the Republican speaker.

PAGE: That's such a hard question, Wolf. It's just hard to know.

(LAUGHTER)

BLITZER: We'll leave it for next week. Study it, and get back to us next week.

(LAUGHTER)

Susan Page, David Brooks, Steve Roberts, thanks for joining us.

Up next, Bruce Morton's "Last Word."

(BEGIN VIDEO CLIP)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): The protesters sometimes say that what they really want if for poor countries to be less exploited. They had should have unions, minimum wages.

(END VIDEO CLIP)

BLITZER: The fight against globalization, is it a lost cause?

(COMMERCIAL BREAK)

BLITZER: Welcome back. Time now for Bruce Morton's "Last Word" on the new global order.

(BEGIN VIDEOTAPE)

MORTON (voice-over): The protesters, memorably in Quebec last month, more quietly in Washington last weekend -- protest fatigue, perhaps, was a factor.

The protesters, anyway are protesting globalization. But globalization, the increasing interconnectedness of just about everything, is surely as inevitable as crab grass or e-mail. A few tiny corners of the world may be able to stay Shangri-Las, walled off from the rest of us, but not many.

So the protesters sometimes say that what they really want is for poor countries to be less exploited. They should have unions and minimum wages and so on. Some plants in some poor countries do. The New York Times reported recently on a factory in Salvador, which had a union, some benefits like day care for employees' kids. But wages were still low because if they went up too much, the jobs would go next door to Guatemala or Honduras. Countries compete for manufacturing jobs. Unless you imagine some giant government handing them out somehow, that competition will continue. And governments do very badly at managing economies, as the late Soviet Union proved.

Here in the United States, the old manufacturing jobs are going -- couldn't compete with cheaper foreign labor or, maybe as often, with automation. In a modern automobile factory, the workers are the people in white coats walking around and making sure the robots are doing what they are suppose to do. The kind of manufacturing jobs that millions had in the 1950s just don't exist anymore.

How does the United States compete since it will never match the developing world's low wages? With high tech. Jobs for craftsmen, bricklayers, plumbers, auto mechanics will always be there, but the old manufacturing jobs have yielded to more technological ones, jobs which require computer skills. Even in something as traditional as the news business, reporters now carry computers. And the boys and girls on the bus talk modems as much as what the candidate just said.

The global economy is here. The global village is just about here, and that won't change. It makes demands on developed countries as well as emerging ones. Countries like the U.S. must educate their young people, must turn out men and women who can apply these high- tech trades.

The young protesters worry about third world countries, but the future speaks to the protesters, too. If you want to compete, get the best education you possibly can. The new century is hip deep in high- tech.

I'm Bruce Morton.

(END VIDEOTAPE)

BLITZER: Thanks, Bruce.

Now it's time for you to have the last word, first on our discussion last week on former Senator Bob Kerrey's military actions during the Vietnam War.

Paul in California writes this: "I believe that Mr. Kerrey should be left alone. Enough is enough. Let the man begin his new life in the private sector with his new wife and child on the way. I am one person who will always hold Bob Kerrey in high regard."

And a similar sentiment from Craig in South Carolina: "I feel Senator Kerrey is being punished by the media. He has been awarded the Medal of Honor for other actions in Vietnam. He had the courage to go to Vietnam and he had the courage to come forward. As far as I am concerned, his credibility is intact."

About James Carville's appearance on our show last week, Alexander in New Hampshire says: "Why do you continue to have James Carville on? He is obnoxious, opinionated and contributes nothing worthwhile." Alexander, he speaks so highly of you.

And a compliment from Sean in Atlanta. He says this: "I've always appreciated your non-sensationalistic and objective approach to the day's news. I respect your approach and your work. Keep it up."

Thanks, Sean, I appreciate that.

As always, I invite your comments. You can e-mail me at LATEEDITION@cnn.com. And don't forget to sign up for my free weekly e-mail at cnn.com/email.

And when we return, we will reveal what is on the cover of this week's major new magazines. Stay with us.

(COMMERCIAL BREAK)

BLITZER: And now a look at what's on the cover of this week's major news magazines.

"TIME" magazine says, "Believe it or not, this 91-year-old nun will help you beat Alzheimer's. A landmark study of the disease sheds new light on what causes it and how to prevent it," on the cover.

"Newsweek" examines "Pearl Harbor: Hollywood versus history. A first look at the soon-to-be-released movie and the real day of infamy," with a scene from the movie on the cover.

And on the cover of "U.S. News and World Report": "Outstanding boarding schools: A guide to finding a great education away from home."

And that's your LATE EDITION for Sunday, May 6. Please join us again next Sunday and every Sunday at noon Eastern for the last word in Sunday talk.

And if you missed any of today's show, you can tune in tonight, 7:00 p.m. Eastern, for a one-hour replay of LATE EDITION.

I will see you tomorrow night on Wolf Blitzer Reports at 8:00 p.m. Eastern. Until then, thanks very much for watching. Enjoy the rest of your weekend. I'm Wolf Blitzer in Washington.

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